REPUBLIC OF TRINIDAD AND TOBAGO IN THE HIGH COURT OF...

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REPUBLIC OF TRINIDAD AND TOBAGO

IN THE HIGH COURT OF JUSTICE

Claim No. CV2011-00840

BETWEEN

HINDU CREDIT UNION CO-OPERATIVE SOCIETY LIMITED

(IN LIQUIDATION)

Claimant

AND

RAMDATH DAVE RAMPERSAD

First Defendant

MOHAN JAIKARAN

Second Defendant

Before the Honourable Mr. Justice Vasheist Kokaram

Date of Delivery: Wednesday 21st January 2015

Appearances:

Mr. Farid Scoon for the Claimant

Mr. Dharmendra Punwasee for the First Defendant

Mr. Michael Rooplal for the Second Defendant

JUDGMENT

1. This is a trial of a claim by the Hindu Credit Union Co-operative Society Limited (HCU),

against the Second Defendant, Mohan Jaikaran for breach of a compromise agreement dated

26th

September 2006 (“the compromise agreement”). It is alleged that the compromise

agreement was inter alia for the assignment of a radio and television licence in settlement of

pending High Court proceedings. HCU is seeking a refund of a sum of $10million paid to

Mr. Jaikaran by HCU for the said television licence.

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2. In 2002, HCU entered into negotiations with Mr. Jaikaran to purchase his special licences

under which he operated a radio station, Massala Radio 101.1 FM, and a television station

Channel 4.

3. The parties entered into two agreements with respect to these licences. These were a sale

agreement dated 23rd

December 2002 and a joint venture agreement dated 27th

June 2003.

However in the period 2003 to 2006 disputes arose between them over the compliance with

the terms of these agreements and in particular of HCU’s ability to operate the television

licences exclusively under an entity known as Global TV Company Limited (“Global TV”).

Mr. Jaikaran during that period was pursuing his own television operations of a TV Station

known as WIN TV.

4. The dispute eventually led to litigation in 2006 between these parties when in High Court

proceedings CV2006-02538 (“the 2006 litigation”) HCU commenced proceedings against

Mr. Jaikaran seeking inter alia injunctive relief to restrain him from transferring the said

licences to anyone other than the HCU. On 27th

September 2006 the Court discharged those

injunctions and dismissed HCU’s notice to continue the injunctions. The claims were

withdrawn by the HCU.

5. It is the circumstances in which the 2006 litigation was discontinued which lies at the core of

the present dispute.

6. HCU contends that its withdrawal of the action was based upon the compromise agreement.

The terms of that alleged agreement provided for the assignment of the licence rights of

Massala Radio to Massala Radio Company Ltd and for the sum of $10m, which was

previously paid to Mr. Jaikaran for the televisions licences, to be converted into $2.4m worth

in shares with Global TV. The parties were to continue the project of the construction of

Global TV.

7. HCU contends that Mr. Jaikaran notwithstanding the compromise agreement continued his

own operation of WIN Radio and WIN TV and failed to comply with any of the terms of that

compromise agreement. As a result on 3rd

March 2011 HCU commenced the instant

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proceedings against Mr. Jaikaran for inter alia damages for rescission of the compromise

agreement and repayment of the sum of $10million together with interest.

8. Mr. Jaikaran’s defence is a simple one. He contends that he never signed the alleged

compromise agreement. Indeed the first time he said he saw this agreement was when these

proceedings were served on him. He further alleges that even if it was executed by him the

action is statute barred and the agreement itself is void for illegality being a breach of the

provisions of Telecommunications Act Chapter 47:31 (the Act).

9. At the pre trial review in these proceedings it was agreed that the main issue was to

determine whether Mr. Jaikaran did execute the compromise agreement. The issues of

whether the action is statute barred and whether the agreement is illegal will arise if the

agreement was in fact executed by both parties.

10. There were only two witnesses in this trial. Mr. Harnarine for the Claimant and Mr. Jaikaran.

For the reasons set out in this judgment I am of the view that the parties did not enter into this

compromise agreement. There were too many inconsistencies in the case of the Claimant for

this Court to find that such an agreement was in fact made by the parties. Its pleaded case

was not consistent with the contemporaneous documents nor is there any plausible reason

advanced why such an agreement would have been entered into in the context of the facts

and history of dealings between the parties from 2005 to 2007.

11. If however I am wrong that Mr. Jaikaran did execute the agreement I also hold that (a) the

claim is statute barred and (b) the contract is illegal and unenforceable for the reasons set out

in this judgment.

Preliminary observation: the claim by the HCU is not maintainable in law

12. HCU is a Co-operative Credit Union society in liquidation under the Co-operative Societies

Act Chp. 81:03. Under the provisions of the Act Mr. Ramdath Dave Rampersad was

appointed the liquidator of HCU. It is to be noted that Section 63 of the Cooperative

Societies Act confers unto the liquidator the power inter alia “to institute and defend actions

and other legal proceedings on behalf of the HCU in the name of his office.” The Claimant in

this action is in fact the HCU and not the liquidator. There is nothing on record indicating

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any consent by the liquidator for HCU to commence or continue these proceedings in the

name of the HCU. Originally, this claim also included a claim against the liquidator (the First

Defendant) for damages for negligence, malfeasance and breach of statutory duty in the

performance of the liquidator’s duties in failing to enforce the said compromise agreement.

The liquidator himself had sought in an earlier application filed in these proceedings to strike

out these proceedings against himself on the basis that he had not authorised the institution of

this claim against him. I had dismissed that application principally for the reason that section

63 does not debar the HCU from bringing this claim against the liquidator in circumstances

where the liquidator failed to act to protect the interests of Company. See HCU v

Rampersad and Jaikaran CV 840-2011. In my view the Board retained a residuary power

to bring such an action which is necessary for the protection of the assets for the benefit of

members against the improper actions of a liquidator.

13. However a day before this trial commenced, the claim against the liquidator was withdrawn

by HCU by notice filed on 15th

December 2014 leaving only its claim against Mr. Jaikaran

simpliciter. That discontinuance in my view is a significant event. Now that the liquidator is

no longer a party to this action the question that comes into sharp focus is whether there is

any basis in which these proceedings can legitimately continue in the name of the HCU

without the involvement or consent of the liquidator. I brought this to the attention of

Counsel for HCU on the morning of the trial and the effect of his withdrawal of the claim

against the liquidator. I also pointed out that there have been no terms brought to the Court’s

attention outlining any approval of the liquidator or consent to continue or maintain this

action against Mr. Jaikaran or any matter addressing section 63 of the Act. I had asked

counsel for HCU to bring such matters to my attention, if it existed. Counsel indicated from

the bar table that the liquidator has consented to these proceedings as a term of the

withdrawal of the claim. It is inappropriate to make such a submission without pursuing his

obligation to bring before this Court the terms on which the claim was withdrawn against the

liquidator or the said consent. To date nothing has been filed and the terms of the withdrawal

of HCU’s claim against the liquidator are unknown to this Court.

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14. This in my view is a credible reason to strike out these proceedings which are being

maintained by HCU in its own name against Mr. Jaikaran as I had alluded to this in my

earlier judgment.

15. In paragraph 13-15 of my earlier judgment I held:

“[13] The liquidator submits that upon the appointment of the liquidator the powers of

the Board of Directors are immediately discontinued. I accept this proposition on

the basis of (a) a proper reading of section 61 and section 63 of the Act (b) the

well known authority of Re Union Accident Insurance Co. Limited [1972] 1

All ER 1105 @ pg 1113 which was referred to in HCU v AG H.C.592/2011 per

Gobin J and Fargo Limited v Godfrey [1986] 3 AER 279. In Re Union however

the Court pointed out:

"It is of course well settled that on a winding up the board of directors of a

company becomes functus officio and its powers are assumed by the

liquidator, and my attention was drawn to Re Mawcon [1969] 1 AER 188

at 192 where Pennycuik J stated in effect that appointment of a provisional

liquidator had the same result. No doubt that is so but it is common ground

that notwithstanding the appointment of the provisional liquidator the

board has some residuary powers, for example it can unquestionably

instruct solicitors and counsel to oppose the current petition and if a

winding up order is made, to appeal against that order"

[14] In cases where there is wrongdoing by the entity placed in charge of the assets of

the company be it a liquidator or receiver/manager there is a line of authority

suggesting that the company still has the authority to commence proceedings

against that person. See Newhart Development Ltd (supra).

[15] If the question is asked has the power to bring an action against the liquidator for

misconduct been assumed by the liquidator, the answer is an obvious no. It is

difficult to fathom a circumstance where the liquidator will commence

proceedings against itself. See Re Union per Plowman J. This is the short answer

to the liquidator’s application. I see great merit in the liquidator’s contention

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however if this was an action simpliciter between HCU and the second

Defendant. Indeed in such a case it would fall squarely with the ruling of Gobin J

in HCU v AG (sic), clearly the liquidator’s approval is needed as a pre requisite

to taking that step. Similarly it cannot take any action against a proposed debtor

without the sanction of the liquidator.”

16. In HCU v Sir Anthony Coleman QC CV 2011-00592 in deliberating on the central issue as

to whether the power of a board of a credit union to commence actions in the name of the

Society survives the appointment of the Liquidator, Justice Gobin held that it is “trite law”

that the board becomes functus officio:

“While there may be a need for a specific order dissolution (sic) of the board under S.4,

there can clearly be none once a liquidator is appointed under S58. Given the purpose of

his appointment and the powers of the liquidator, it follows that upon Mr. Rampersad’s

appointment, the board ceased for all intents and purposes to function. The raison d'être

of the board comes to an end, its continued existence became pointless. This being so, the

result is that there was no power in the defunct Board to bring these proceedings...

...The applicant filed the instant application in the name of the HCU without the consent

of the liquidator. Even if this application was one that fell within that limited class of

actions which a board could institute ..., then the claimant would still have breached an

important rule of procedure which would have been fatal to the claim as constituted.”

17. In Fargo Ltd v Godfrey [1986] 3 AER 279 at 281 Walton J pointed out some of the options

available to the Company in liquidation if it wished to bring an action against a third party.

“Now, that being the case, the plaintiff can take a variety of courses. The Plaintiff

can ask the liquidator to bring the action in the name of the company. Doubtless,

as in virtually all cases, the liquidator will require an indemnity from the persons

who wish to set the company in motion against all the costs, including, of course,

the costs of the defendants, which he may have to incur in bring the action. The

liquidator may be unwilling to bring the action, and, under those circumstances, it

is always possible for the shareholders who wish the action to be brought to go to

the court asking for an order, either that the liquidator bring the action in the name

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of the company, or more usually, that they are given the right to bring the action

in the name of the company, of course, against the usual type of indemnity which

will, if there is any difficulty about the matter, be settled by the court. And I think

that this has been the practice and procedure for a very long time.”

18. In my view the claim by HCU simpliciter as against Mr. Jaikaran is not maintainable in its

present form and is inconsistent with section 63 of the Act. It has no authority to institute

these proceedings and it would be inappropriate for the Court to rule on these proceedings in

the absence of any terms or application by the liquidator approving the continuation of these

proceedings in the name of the HCU.

19. I note that in paragraph 2 of Mr. Jaikaran’s defence it was pleaded that the claim should be

struck out for this reason. However in the Defendant’s written and oral submissions, no issue

has been raised seeking to strike out the claim on this basis and I have had no submissions by

the Claimant either on this matter. I will therefore restrict my findings to the issues that have

been advanced by the parties for determination at the trial.

Background

20. Much of the facts forming the backdrop of this dispute are to be gleaned by the unchallenged

documentary evidence and testimonies of the two witnesses. The alleged compromise

agreement arose from a backdrop of negotiations between the parties to jointly operate a

radio and television station. In 2002 HCU was desirous of entering into the broadcasting

industry. Mr. Jaikaran possessed a special licence under the Wireless Telegraph Ordinance

1936 for a television station and radio station both granted on 30th

August 2000. Together

with his wife he was the majority owner of shares in Massala Radio Limited.

21. The parties entered into a sale agreement with respect to these licences dated 23rd

December

2002 for the purchase of the Jaikaran’s interest in the licences for the price of $10m for the

TV station and $7m for the radio station.

The sale agreement

22. The intention of the parties in the sale agreement was for the HCU to operate a Radio station

“Bollywood Massala 101.1FM”. The principal terms of the sale agreement were as follows:

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That the sum of $17 million will be paid in the following manner:-

o The sum of $1.2 million on the execution of the agreement

o The sum of $10.8 million on or before the 23rd

March, 2003.

o The sum of $4 million to be deposited in the HCU Income and Growth Fund

o The sum of $1 million to be converted in shares in the HCU Communications

Company.

Mr. Jaikaran was to be appointed a Director of the HCU Communications Company.

The Radio Station was to be delivered together with all its equipment to HCU on the

15th

January, 2003.

The Mr. Jaikaran’s list of receivables set out in the agreement was to remain the

property of Mr. Jaikaran and if HCU collected any of same it will be credited to the

account of the Mr. Jaikaran.

The Radio Station will operate under the new name of Bollywood/Massala 101.

Mr. Jaikaran shall indemnify the Purchaser for any taxes, charges, liens, statutory

payments or otherwise that may arise for the period prior the delivery of the company

to the Purchasers.

Both parties agreed to adhere to all the conditions and warranties of the licences and

not to do anything that will cause a breach of the conditions and warranties contained

therein.

Mr. Jaikaran agreed to execute all documents that were necessary to complete this

transaction.

Mr. Jaikaran will have the first option to re-purchase the new Radio Station under the

name Bollywood/Massala 101 in the event that the said Radio station becomes

unprofitable/bankrupt and/or is required to be liquidated.

Time was made of the essence in this contract.

23. One of the factual disputes that emerged in these proceedings was whether Mr. Jaikaran was

indeed paid the total sum of $17million. He contends in his testimony that he was only paid

$13.6million. There was no cross examination on this issue and this dispute as to whether the

full sum was paid forms part of the backdrop of the continuing dispute of the parties leading

up to the alleged compromise agreement.

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24. HCU Communications Limited was subsequently incorporated on 25th

June 2002 as Mr.

Harnarine explained in his testimony for the purposes of managing the communications

portfolio of HCU. Such management included the proposed Bollywood/Massala and the

proposed television station. It also managed the Probe newspaper and Radio Shakti 97.5 FM.

25. The parties had agreed by the sales agreement to adhere to the terms of the agreement and for

Mr. Jaikaran to execute all the documents necessary to complete the transaction.

26. A meeting was held by HCU with the Ministry of Public Administration and Information.

The Ministry was responsible for the assignment of licences under the Ordinance. By letter

dated 21st July 2003 it indicated to HCU’s Attorneys that it sought confirmation of the new

arrangement being put in place with Mr. Jaikaran to operate a radio station in light of a

previous basis on which HCU was operating in the absence of licence from the Government

through a management contract.

27. Mr. Jaikaran and HCU subsequently entered into a joint venture agreement.

The joint venture

28. The reasons why a joint venture were necessary was not made altogether clear in this trial.

Mr. Harnarine in his testimony indicated that the joint venture agreement was prepared by

HCU’s lawyers taking into consideration the advice it had received from the Ministry.

However no such advice was given and there is no evidence of any previous management

contract which had met with the Ministry’s approval which permitted the HCU to operate a

radio station without a licence from the Government. Mr. Jaikaran in his testimony stated that

he simply went along with what was the recommendation by the HCU.

29. Irrespective of the motivations the joint venture agreement provided in simple terms for the

following:

“(2) The parties hereto shall make available the following resources:-

a. Mohan

1) A special licence granted to him for Television Station under the Wireless

Telegraphy Ordinance Chapter 36 No. 2 on the 30th

August, 2000.

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2) A special licence granted to him for Radio Station under the Wireless

Telegraphy Ordinance Chapter 36 No. 2 on the 30th

August, 2000.

b. Massala – all the equipment, technology, contracts and goodwill of its business.

c. The Credit Union

1) All the equipment, technology, contracts and goodwill of Radio Shakti.

2) The sum of $17m which is to be used for the establishment of the

communication business.

3) The parties hereto agree to enter into a Management Contract with HCU

Communications Company (hereinafter called “the company”) to manage the

operations of the Communications business.

4) The parties hereto agree that their receptive rights contained herein are not assignable.

5) The parties hereto agree not to enter into any other business of a competitive venture

during the existence of this contract.

6) The parties hereto each warrant that they manage and operate their respective

contracts, business and other interest so as not to endanger the loss of interest they

each bring to this joint venture.

7) The parties hereto agree that nothing herein creates a partnership amongst them.

8) The parties hereto agree not to disclose the contents of this agreement to anyone

except with the consent of the other parties and to treat the information herein with

confidentiality.

9) The profit or loss from this joint venture will be determined in a private basis based

on the value of each party’s contribution.”

30. Subsequent to entering into this agreement the HCU passed a special resolution to the effect

that out of the previous monies paid to Mr. Jaikaran a lien would be placed on the sum of

$2.4million for the purchase of shares in Global TV and so Mr. Jaikaran would have $2.4

million in shares and the HCU $7.6 million in shares in Global TV. This is noteworthy as a

term similar in effect was to be repeated in the alleged compromise agreement.

The June 2004 letter to TATT

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31. In June and July 2003 the parties travelled to the Dominican Republic and Ohio seeking to

purchase television equipment. In December 2003 Global Television was incorporated and

Mr. Jaikaran became a director. Eventually HCU entered into a Systems Integration

Agreement with a Harris Corporation. A letter dated 27th

June 2004 was signed by Mr.

Jaikaran addressed to the Chairman of the Telecommunications Authority of Trinidad and

Tobago (TATT) requesting that his licence be assigned to Global TV. Whether this letter was

actually delivered to TATT by Mr. Jaikaran was another factual dispute in this trial.

32. Mr. Harnarine contended in his evidence in chief and was adamant in his cross examination

that this letter was sent to TATT. Mr Jaikaran contended that the letter was never sent and in

his cross examination indicated that the letter was only done to facilitate the financing of

HCU’s purchase of television equipment from Harris Corporation. Indeed there is no

evidence in these proceedings that TATT did receive this letter, nor is there any

correspondence from TATT acknowledging receipt or of acting upon such an important

document. In fact in HCU’s letter to TATT dated 30th

June 2006 which confirmed the points

made in a meeting between the HCU and TATT’s officials, the HCU recorded that Dr John

Prince of TATT was “unaware of such a letter”.

33. Mr. Harnarine in his evidence in chief (paragraph 42) accepts that the letter was written in

the context of and as a condition and requirement of Exim Bank of the USA before granting

a loan.

34. Indeed in subsequent legal proceedings in CV2007-01168 it was acknowledged by HCU that

the letter written by Mr. Jaikaran was never sent to TATT. It is very strange therefore that

Mr. Harnarine in the face of such an acknowledgment will contend in these proceedings

under cross examination that the letter was sent to TATT. Such an insistence only served to

affect his credibility. It is highly probable therefore that the letter was in fact never sent to

TATT and indeed was only used primarily for the purpose of “ticking off” a checklist of

requirements to acquire the loan from Exim Bank.

Negotiations between the parties 2005 to 2006

35. On 17th

June 2004 the HCU entered into a Credit Agreement with the BAC Florida Bank.

There parties appeared content with their respective roles until March 2005 when it was

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reported in the Express Newspaper that HCU was engaged in negotiations with the CL

Financial Group. This sparked a round of controversy between the parties leading to

negotiations between HCU’s attorneys and Mr. Jaikaran’s attorneys, JD Sellier and

Company. The correspondence passing between the attorneys representing the parties’

negotiations are not in dispute in this matter.

36. It is safe to say that over the period 2003 to 2006 the parties had not fully performed the

terms of their agreements. The HCU were making attempts in this period to set up a TV

station and Mr. Jaikaran complained in his testimony of the slow pace of progress by HCU to

implement the sale agreement and joint venture and failed to pay the full purchase price.

37. In particular in paragraph 21 of his witness statement Mr. Jaikaran complained that:

“a. The Claimant failed to pay the required fees for the Radio Station Licence for the

years 2003 and 2004.

b. The Claimant failed to provide me with any plans for the establishment of a

television station.

c. Prior to December 2005 the Claimant was not in possession of any equipment for

the establishment of a television station despite my efforts to have them do so.

d. It was not until April, 2006 that the Claimant had any equipment for use by a

television station in its possession. The Claimant still had not acquired certain

important items of equipment which are vital to the functioning of the television

broadcasting equipment, namely the links to hook up the network.

e. The Claimant never acquired a transmitter site or a tower, which are both

necessary requirements in order to commence broadcasting of television

programming.

f. The Claimant failed to provide me with any portion of the profits generated from

the communications business which business included monies earned by “Radio

Shakti” and “Bollywood/Massala 101”.

g. As at December, 16th

2005 the Claimant had failed to provide me with any

audited statements or financial data concerning the operations of “Radio Shakti”

or “Bollywood/Massala 101”.

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h. The Claimant effectively excluded me from any editorial or management control

of Massala.”

38. In 2005 the parties became embroiled in a dispute over the fulfilment of the terms of the sale

and venture agreements and there were discussions on the settlement of Mr. Jaikaran’s claims

that the HCU was in breach of the agreements.

39. By letter dated 18th

April 2005 Mr. Jaikaran indicated his intention to negotiate with HCU to

re-purchase the special licences and the shares of Massala and the interest of HCU in

Bollywood Massala 101.1FM and the joint venture communications business.

40. In correspondence dated 24th

October 2005 from Mr. Jaikaran’s attorneys to the HCU’s

attorneys an important offer was made in the following terms :

“In a final effort to avoid litigation in this matter our client has instructed us to write to

you offering settlement on the following terms:

1) Our client will buy out your client’s interest in the joint venture including all

shares in the capital of HCU Communications Limited (“HCU Communications”)

and Massala Radio Limited (“Massala”) registered in your client’s name or in any

nominee for your client;

2) The price will be agreed by the parties and in default of agreement determined on

the basis of a valuation carried out by an independent chartered accountant who

shall be appointed jointly by the parties and in default of agreement on such

appointment by the President for the time being of ICATT. The valuation will be

made on the basis that our client is entitled to one half share or interest in HCU

Communications and Massala under and by virtue of the Joint Venture

Agreement;

3) Our client will purchase the television broadcast equipment imported by your

client which is still at the local port because of non-payment of customs duties

and port rent at a price equivalent to the landed duty paid cost of the equipment

and all outstanding port charges. Any sums due and owing to the supplier or to a

bank or financial institution which provided financing for acquisition of the

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equipment will be deducted and paid directly to the supplier or bank/financial

institution as the case may be;

4) All and any sums due and owing to our client in respect of the Joint Venture

Agreement will be credited to the purchase price;

5) The above terms and conditions and all and any other terms and conditions agreed

by the parties shall be incorporated into a formal share and asset purchase

agreement in a form approved by our firm on behalf of our client.

Pending a resolution of the issues between our respective clients in connection with the

joint venture neither your client nor HCU Communications nor any other company which

may be formed to operate the television station shall use our client’s television station

licence except with our client’s express written consent. Our client further reserves the

right to prevent HCU Communications and/or Massala from using the radio station

license.”


November 2005 the HCU rejected the proposal. The subsequent

correspondence of Mr. Jaikaran’s attorneys dated 16th

December 2005 referred to a draft

agreement sent by the HCU to Mr. Jaikaran’s attorneys. The draft agreement included the

following provisions:

“1) A provision for the HCU to pay to Mr. Jaikaran sums totaling $3.6 million in

consideration whereof he will consent to the transfer by HCU to a third party of

rights, shares and interest in Bollywood/Massala 101.1 FM and Massala;

2) A recital of the fact that Mr. Jaikaran has declined to exercise his first option to re-

purchase the Massala radio station.”

42. In that correspondence Mr. Jaikaran through his attorneys at law indicated that in light of the

HCU’s breaches of the sale and venture agreements that they were terminated with

immediate effect. Importantly he also added that all payments made by HCU towards the

purchase price of the special licences will be refunded to HCU subject to his right to set-off

against such payments all damages to which he is entitled including loss of profits by reason

of HCU’s breaches of the sale agreement and the joint venture agreement. Mr. Jaikaran in a

subsequent letter by his attorneys dated 16th

December 2005 repeated that the sale and

venture agreements were terminated.

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December 2005 HCU indicated through its attorneys that it did not accept

the said termination. By letter dated 20th

January 2006 Mr. Jaikaran’s attorneys indicated that

without prejudice to his rights that the agreements were terminated he was open to negotiate

a new arrangement. The last offer on the table by Mr. Jaikaran was stated to be as follows:

“1) A new company must be incorporated as the television joint venture company in

the name of Win Holdings Limited.

2) Your client will have a controlling interest of 55%.

3) Your client will provide the Special TV Licence together with a capital

investment of $10 million and our client will provide the television equipment

together with a capital investment of TT$10 million. Contemporaneously with

execution of the new joint venture agreement each party must deposit 50% of its

capital investment into an interest bearing escrow account in the joint names of

respective law firms and the remaining 50% must be paid into a bank account

established by the new company within ten (10) days thereafter. The TV

equipment will have to be checked out and costs of repairs to bring it into

working condition will have to be for our client’s account.

4) The Articles of Incorporation and Bye-Laws of the new company must be

approved by your firm.

5) The Board of the new company will consist of seven (7) directors of whom four

(4) should be nominated by your client (with your client as Chairman) and three

(3) of whom shall be nominated by our client.

6) The parties must enter into a shareholders’ agreement which will regulate the

dealings between them as well as the management and administration of the new

company. In particular, the shareholders agreement will contain restrictions

against certain actions being taken by the company (including the sale of the new

television station) without the unanimous approval of the shareholders and

provisions with respect to the respective rights of the parties to nominate directors

of the company so long as they retain an agreed minimum shareholding (a draft of

the shareholders agreement will be exhibited to the new joint venture agreement).

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7) Your client will be the Chief Executive Officer of the new company at a salary

and other benefits to be agreed as one of the terms of the new joint venture

agreement and incorporated in the shareholders agreement.

8) Details of all equipment purchased or on order for the new television station and

the costs thereof must be provided.

9) Your client must have a first option to purchase the new television station in the

event that the new company proposes to sell the same for any reason whatsoever.

10) The new company must enter into an agreement (the operating agreement) with

your client as the registered owner of the television station licence regulating the

operation of the station and the payment of licence fees and copyright fees and

royalties (a draft of the operating agreement will be exhibited to the new joint

venture agreement). Evidence of payment of all licence fees to date must be

provided.

Additionally you advised that all issues relating to the radio station will have to be

settled and your client is willing to sell his interest therein to our client or

alternatively to buy out our client’s interest at fair market value. To determine a fair

market price you requested the following information:-

1) A detailed list of the assets of Bollywood/Massala 101.1FM and Massala

2) Copies of the audited and management accounts (to the extent that audited

accounts are not yet available) of HCU Communications;

3) Evidence of payment of all licence fees and copyright fees and royalties payable

to date in respect of the radio station licence and the operation of the radio station.

Finally you advised that the parties would have to agree what payment is to be made

between them to resolve the outstanding $2.7 million due and owing to your client

and the refund of payment made by our client to yours towards the purchase of the

Special Licences.”

44. Ultimately by 8th

March 2006 HCU’s attorneys had responded indicating that in fact the sales

and venture agreement were void in law. It will be safe to say that at that time both parties

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recognised that these agreements were of no value. If the idea of a joint venture was to be

pursued, there was a need to return to the bargaining table.

45. However there were no further proposals forthcoming and Mr. Harnarine states in his

examination in chief (paragraph 51) that on 14th

July 2006 Mr. Jaikaran held a public

launching of a new television station under the name of WIN TV Chanel 35 and WIN Radio

101.1FM. By letter dated 28th

December 2006 Mr. Jaikaran through his attorneys indicated

that he was proceeding with the establishment of his television station and a new radio

station which will be broadcast on his radio station licence 101.1 FM.

The 2006 litigation

46. In 2006 HCU filed proceedings CV2006-02538 against Mr. Jaikaran seeking inter alia an

injunction to restrain him from inter alia disposing assigning or selling the said radio and

television licences.

47. In that claim the HCU also sought a declaration that the sales and venture agreements were

valid and subsisting and seeking specific performance of same. By order dated 27th

October

2006 the injunctions which were granted on 29th

August 2006 were discharged and the claim

was withdrawn on 4th

April 2007. HCU contends that the withdrawal of the claim was as a

result of the parties having brokered a settlement by executing the alleged compromise

agreement.

The compromise agreement

48. The compromise agreement is dated 27th

September 2007. It appears to bear signatures of

Mr. Harnarine, Mr. Jaikaran as well as the Secretary of the HCU, Gayndlal Ramnath.

Interestingly it appears to be a contract signed by Mr. Harnarine as President of the HCU

whereas the other agreements which are not in dispute take on the traditional form of due

execution by a company through its secretary with the usual “The common seal of....”. I have

not seen the original of the compromise agreement and only the copy was disclosed. It also

bears what appears to be a stamp of HCU. No forensic evidence was led by either party to

demonstrate whether Mr. Jaikaran’s signature on the document was authentic or not. Nor

were there any witnesses who attested to the presence of the parties and their execution.

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49. The agreement acknowledges the existence of the ongoing 2006 litigation and that the parties

agreed not to continue with the action. The terms of the compromise agreement are as

follows:

“NOW IT IS AGREED AS FOLLOWS:

1. That Radio Massala 101.1 FM will remain under the Management of the HCU

Communications Company Limited [the Management Company] with Mohan

Jaikaran at all material times being a Director thereof.

2. The licence rights of Radio Massala 101.1 FM while owned by First Party shall be

assigned to Radio Massala Company Limited.

3. That when the matter of renewal of the Radio Licence owned by the First Party

comes up for renewal, the said licence will be renewed by the First Party under the

name of Radio Massala Limited.

4. It is also agreed by the First Party that in respect of the Television licence owned by

the First Party, the amount of $10million that was paid by the Second Party to the

First Party for its use, the First Party will convert $2.4 million [out of the $10 million]

that was placed in an Income and Growth Account with the First Party into shares

with Global TV Company Limited, the company that was registered as the Television

Station for which the TV licence of the First Party would be used for Television

broadcasting exclusively.

5. The First Party also agrees with the Second Party that the First Party will not continue

its proposed project of WIN TV but will continue the project of construction of a TV

Station to be called Global Television in a building leased from Rohan Saisban at the

Corner of Mulchan Seuchan Road and Endeavour Main Road in view that the Exim

Bank of USA had already paid to Harris Corporation, USA for television equipment

for Global TV the sum of approximately US$4.4 million and that the television

equipment had already arrived in Trinidad and Tobago.

6. The First Party will continue to pursue the transfer of the TV Licence owned by the

First Party from the name of the First Party to Global TV Limited a matter that the

First Party had already communicated with the Telecommunications Authority of

Trinidad and Tobago on 27th

June, 2004.

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7. The parties also agree that the First Party will be given exclusive Management rights

of Global TV Limited and will report on the management of the said TV Station to

HCU and Global TV Limited on a monthly basis.

8. The parties also agree that neither Global TV nor Massala Radio 101.1 FM will be

divested to CLICO for any reason whatever.”

51. The alleged compromise agreement against the backdrop of the negotiations and discussions

between the parties represented a complete capitulation by Mr. Jaikaran to the HCU. It was

an about turn in the face of his strong condemnation of HCU’s actions, his desire to

repurchase the station and his termination of the sales agreement. It brought into the fore the

entity of Global TV and reinforced the original sales agreement with the obligation of Mr.

Jaikaran to divest or transfer his licence to this new entity. It is noted however that in relation

to the TV licence that consideration for the transfer of that licence would have been

apparently a conversion of $2.4million which was paid to Mr. Jaikaran into shares with

Global TV. There is no extra payment therefore to Mr. Jaikaran for the transfer of this licence

to Global TV.

The issues

52. At the pre trial review the main issue for determination that was identified was whether the

compromise agreement was executed by Mr. Jaikaran as contended by the Claimant.

Following upon the written and oral submissions of the parties the issues that fall for

determination at this trial are as follows:

(a) Whether Mr. Jaikaran executed the compromise agreement.

(b) If he did whether the claim for breach of contract is statute barred.

(c) If it is not, whether the compromise agreement is void for illegality.

Whether the parties entered into the compromise agreement

53. It is important to understand HCU’s claim on this compromise agreement. According to the

HCU it was an agreement on terms made by the parties to settle the existing 2006 litigation

which essentially was a claim for specific performance of the sales and joint venture

agreements. The essential foundation of a compromise rests on the ordinary law of contract

and the ordinary principles of contract law apply with as much force as in other contractual

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contexts. See Foskett on the Law and Practice of Compromise paragraph 3-01. There are

many procedural vehicles by which parties may enter into a compromise agreement but it is

not essential that the parties enter into a deed. A simple memorandum of agreement would be

sufficient. See Foskett (ibid) para 905-916. Of course the HCU did not make this

compromise agreement a rule or order of the Court nor sought to incorporate its terms in a

consent order. It is a memorandum of agreement which, if it exists, is equally binding on the

parties in full compromise of the existing dispute.

54. In paragraph 16 of its Statement of Case the HCU states that the compromise agreement was

made by the parties and executed on 27th

September 2006. It sets out the material terms of

the compromise agreement. In paragraphs 15 to 18 of the Defence Mr. Jaikaran denies that

the parties made the contract. He says he is a total stranger to it and it is a complete

fabrication “no such agreement was made at any time in the course of such discussions

between Counsels for the respective parties.” No reply was filed by the Claimant. The effect

of this is that the parties are enjoined on this issue as to whether the compromise agreement

was in fact made by the parties and the HCU bears the burden of proving the existence of the

contract between the parties. See Phipson on Evidence 7th

ed. para 6-08.

55. Importantly, if the agreement existed, the effect of making a compromise agreement is to

bring to an end the dispute which it purports to compromise. See Knowles v Robert (1888)

38 Ch Div 263 where at page 272 Bowen LJ observed “As soon as you have ended a dispute

by compromise you have disposed of it.”

56. Foskett on The Law and Practice of Compromise 5th

Ed para 601states the effect in this way:

“Such issues of fact or law as may have formed the subject matter of the original

disputation are buried beneath the surface of the compromise. The court will not permit

them to be raised afresh in the context of a new action. If the parties have agreed that

their original dispute may be resurrected in certain circumstances then of course the

position may be different.”

57. The effect therefore of the alleged compromise agreement is to give rise to new causes of

action and put to an end the disputes in relation to the sales and joint venture agreements

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unless the terms of the compromise permit recourse to the original claim in the event of non

compliance with the agreement.

58. As a matter of proof, a copy of the alleged compromise agreement was annexed to the

witness statement of Mr. Harnarine. There was no explanation given in his examination in

chief as to the location or whereabouts of the original and he failed to give any particulars of

the execution of this agreement either in his pleadings or in his witness statement. In cross

examination Mr. Harnarine was adamant in his evidence that the agreement was signed by

Mr. Jaikaran. He however asserted that the original was in the custody of the liquidator who

failed to provide it to him despite his numerous requests. It is noted however that he is

deafeningly silent on this issue in his witness statement and an examination of the record of

these proceedings reveal that the liquidator during the disclosure process did not list this

document as a document comprising part of their records.

59. Notwithstanding the failure by the Defendant in this case to serve a Notice pursuant to CPR

Part 28.18(1) it has always been the case in these proceedings that the authenticity of the

compromise agreement was in dispute and the case managed along these lines. No party was

taken by surprise by this issue being the main issue for ventilation.

60. Where the identity of the document containing a contract is disputed, evidence is necessarily

admissible to determine the point. See Phipson paragraph 42-01 and Froude v Hobbs (1859)

1 F and F 612. Parker LJ in Masquerade Music Ltd v Springsteen 2001 EWCA Civ. 513

observed that, the original document rule is obsolete and that requirement that a party in

possession of the original of a document should produce it is a reflection of the fact that if the

original was available to him he would not be able to account satisfactorily to the Court for

its non production when inviting the court to admit secondary evidence of its contents. The

practical effect being that the court will attach no weight to the secondary evidence. See

Phipson on Evidence 15th

Ed. para 41-04. Absent an allegation of bad faith or impropriety the

only requirement would be for that party to provide a reasonable explanation for the non

production of the original.

61. As stated in Halsbury’s Laws of England Vol 17(1) para 814:

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“Where a document is not in the possession of either of the parties or because its

authenticity is in dispute... it may become necessary not only to secure its production but

also to give evidence that it is what it purports to be or is tendered as being.”

62. In proving the genuineness of a document “the handwriting and signature of attested

documents may be proved by calling the writer or calling a witness who saw the document

signed or calling a witness who has acquired a knowledge of the writing or by comparison of

the document with another proved document to the satisfaction of the judge to be genuine by

expert or by admissions.” Halsbury’s Laws of England Vol 17 (para 801).

63. Insofar as the copy of the compromise agreement was admitted into evidence the issue is

whether the Court can ascribe any degree of weight to it in light of the totality of the

evidence. This is largely a question of fact. I must be satisfied on a balance of probabilities

that it is likely that Mr. Jaikaran did in fact execute this document. Counsel for the HCU

argued that the Court should have regard to the cross examination of the parties the

surrounding circumstances and his admission of the Crowne Plaza meeting. He contended

that the copy of the agreement was admissible as evidence under the Evidence Act and that

the Court should find that Mr. Jaikaran did execute the document.

64. On this issue of whether the compromise agreement was in fact a genuine document signed

by Mr. Jaikaran there was hard swearing by both men in their cross examination. In assessing

their credibility I must have regard to the guidance of Horace Reid v. Dowling Charles and

Percival Bain, Privy Council Appeal No. 36 of 1987 and more recently of our Court of

Appeal in Anino Garcia v AG CA 86/2011 which applied the following guide in Reid in the

assessment of the credibility of witnesses:

“[Counsel] in his able submissions … emphasised to their Lordships that where there is

an acute conflict of evidence …, the impression which their evidence makes upon the

trial judge is of the greatest importance. This is certainly true. However, in such a

situation, where the wrong impression can be gained by the most experienced of judges if

he relies solely on the demeanour of witnesses, it is important for him to check that

impression against contemporary documents, where they exist, against the pleaded case

and against the inherent probability or improbability of the rival contentions, in the light

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in particular of facts and matters which are common ground or unchallenged, or disputed

only as an afterthought or otherwise in a very unsatisfactory manner. Unless this

approach is adopted, there is a real risk that the evidence will not be properly evaluated

and the trial judge will in the result have failed to take proper advantage of having seen

and heard the witnesses.”

65. There is a modern view that the demeanour of the witnesses’ plays an insignificant part of the

trial judges overall assessment of the credibility of the witness1. Assessing the credibility of

witnesses is perhaps better conducted by a forensic examination of his testimony when

adjudged against contemporaneous documents, his witness statement, pleadings, and

plausibility of the rivalling contentions. Having seen the copy of the compromise agreement

and considering the totality of the evidence I am not satisfied that Mr. Jaikaran did in fact

execute this document and I attach no weight to the copy of the compromise agreement

tendered in these proceedings. I say so for the following reasons:

(a) On the pleadings there is no reply in response to the direct allegation that the

Defendant did not execute the agreement. In the Claimant’s witness statement rather

than provide further information for the Court to accept the credibility of the HCU’s

version of the execution of this document it is silent on this issue. Mr. Harnarine

simply asserts “The Claimant and the Defendant entered into the compromise

1 The idea that fact-finders need to observe witness demeanour is an ancient one and underpins two central aspects

of the Anglo-American procedural model. The first is the principle of morality, which requires all evidence to be

spoken to live in *256 court by a witness (which, in turn, partly explains the rule excluding hearsay evidence in

criminal cases). The second is the idea that there should only be a very limited right of appeal on factual decisions

from trial courts. As the House of Lords stated in Kilpatrick v Dunlop, declining to hear an appeal on the facts: [t]he

manner, appearance, and mode of giving evidence, all the outward and visible signs by which men habitually detect

falsehood or receive an assurance of truth, are unattainable to your Lordships.

While other factors underpin these principles of morality and decision finality, such as the faith in cross-examination

as “the greatest legal engine ever invented for the discovery of truth” and the cost of, and extended uncertainty

caused by, de novo hearings, the supposed value of witness observation as a means of assessing credibility remains a

central article of legal faith. However, psychological research questions the utility of observation in assessing

witness honesty. It also seems unlikely that it assists with the assessment of witness accuracy, since observation is

most likely to lead to inferences about witness confidence. Unfortunately, confidence has consistently been shown to

be at best a very moderate indicator of witness accuracy. When combined with the fact that it is also the most

influential factor affecting witness evaluation, many witnesses will be wrongly assumed to be accurate because of

their perceived confidence (or inaccurate because of lack of confidence). More fundamentally, no factor used to

assess witness accuracy seems to be particularly useful. Studies repeatedly show, at least in relation to identification

evidence, that fact-finders are rarely able to outdo chance in assessing whether or not witnesses are accurate.

Edinburgh Law Review 2014 Truth and demeanour: lifting the veil Donald Nicholson.

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agreement”. I was quite surprised that details of this execution were only forthcoming

in cross examination when Mr. Harnarine announced for the first time that the

agreement was executed at Crown Plaza. This interestingly corresponds with a

meeting acknowledged by Mr. Jaikaran to have taken place which was referred to in

his witness statement. However such a meeting according to Mr. Jaikaran took place

on 17th

July 2005. (See paragraph 30 of the Jaikaran witness statement.) I noted that

under cross examination Mr. Harnarine was quite obviously embellishing his case in

stating that documents and letters had in fact referred to the compromise agreement

when clearly they did not.

(b) Such an understatement of the circumstances in which the agreement was executed is

quite unhelpful for the HCU in light of the obvious references to a witness to the

agreement Mr. Ramnath who did not make himself available for cross examination.

Further under cross examination Mr. Harnarine stated that the agreement was

prepared by the company’s secretary Mr. Gayndlal Ramnath. Both of these witnesses

it was confirmed by Mr. Harnarine were available and in the country yet they did not

file witness statements in this matter. I am entitled at the highest to draw an adverse

inference against the HCU for failing to produce these witnesses. At the lowest it

forms part of the backdrop of the Courts assessment of the credibility of Mr.

Harnarine in proving the execution of this document.

(c) In proving the existence of the compromise agreement primary evidence can be given

of the original or by admission. In this case secondary evidence of a copy of the

compromise agreement was produced. It was done in circumstances where no

satisfactory explanation was given in HCU’s evidence in chief as to the location of

the original.

(d) Mr. Jaikaran in his cross examination denied that he made the compromise agreement

but admitted that he met Mr. Harnarine at Crowne Plaza for “a cup of coffee”. In his

witness statement he did refer to one meeting in Crowne Plaza but this was in 2005

during the course of the negotiations between the parties. At that meeting they had

agreed in principle for Mr. Jaikaran to acquire an equity in Global TV but according

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to his witness statement nothing came of it. Subsequent to that meeting were the

correspondence by the attorneys referred to above terminating the agreements for sale

and joint venture. He appeared in his cross examination to be reliant totally on his

legal advisers to guide him through the negotiations. His answers at times were vague

or even exasperating by saying simply “Whatever is in the witness statement I stand

by it” and he did not appear to have a detailed knowledge of aspects of his witness

statement. However he was not seriously tested beyond those responses.

(e) The alleged compromise agreement was executed according to Mr. Harnarine as a

means to settle the 2006 litigation. However this is not supported by any of the

HCU’s evidence. There is no mention of this compromise agreement in the High

Court proceedings. The compromise agreement was not entered as a consent order or

a Tomlin order. There is no record in the Court proceedings that the action was settled

on terms.

(f) Quite the other way the evidence contained in the contemporaneous documents that

are not in dispute demonstrate that the parties had not settled or compromised the

action or arrived at an agreement on terms: The agreement is quite specific in its

terms yet these terms were not mentioned in subsequent High Court proceedings

initiated by HCU in (i) an ancillary claim against Mr. Jaikaran filed in CV1811 of

2009 and in (ii) injunctive proceedings which was heard and determined by Justice

Jamadar in CV2007/1168 an action filed by Global TV v Mr. Jaikaran. In

contemporaneous correspondence: by letter dated 14th

November 2006 the attorneys

who acted for HCU Devesh Maharaj and Associates indicated quite clearly “we are

in the process of finalizing our instructions as to settlement terms however in the

interim we feel it is prudent to withdraw the entire claim with no order as to

costs. This course of action as you will no doubt agree will enable the parties to

properly negotiate a settlement without the pending litigation hindering any

possible resolution.” There is no explanation by HCU as to why such a letter was

written by their attorneys after the alleged compromise agreement was allegedly

executed. HCU’s own letter clearly indicates that the parties had not arrived at terms

of settlement.

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(g) By letters dated 12th

December 2006 and 28th

December 2006 Mr. Jaikaran acting

through his attorneys was quite clear in his intention of firstly terminating the

agreements for sale and joint venture and secondly declaring his intention to establish

a new radio station under 101.1FM. There was no reply to this last correspondence by

HCU either asserting its position on its settlement or drawing to Mr. Jaikaran’s

attention the existence of the compromise agreement. Indeed absolutely no mention

was made of this compromise agreement at all until this action was filed in 2011.

(h) There is no reference to the compromise agreement in two subsequent proceedings

instituted by Global and the HCU. It is strange that if the agreement did exist that it

did not form the basis of a new cause of action and indeed these new actions were

based on the existence of the sales and joint venture agreements which were in fact

superseded by the alleged compromise agreement if it existed.

(i) Finally by letter dated 10th

January 2007 in a letter addressed to TATT, clearly the

authority who should have been the recipient of the details of any agreement to

transfer radio or television licences, no compromise agreement was produced. Instead

another version of a settlement was referred to indicating that HCU would remain in

full control of Radio Massala 101.1FM and that the parties agree to suspend all

operations of the Television Station project until the matter is amicably resolved. This

was written by the CEO of the HCU: Clearly that was a misrepresentation of the

alleged compromise agreement if it existed at all. These contemporaneous documents

do not support the HCU version of events that such an agreement was made by the

parties.

(j) The lack of compliance with pre action protocols in this matter is of grave concern. I

have not seen any exchange of correspondence before this matter was launched. It is

not unusual therefore for Mr. Jaikaran to say that he saw the compromise agreement

for the first time when these proceedings were filed. One can only speculate as to the

reasons why HCU delayed for such a long period before commencing this action.

Indeed it follows a multiplicity of legal proceedings concerning this sale and joint

venture agreement and in the context of the failure to come up to proof on such a

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fundamental agreement this latest litigation amounts to a real abuse of the court

process.

66. For these reasons I remain unconvinced as to the authorship of the document and the

Claimant has not demonstrated that the parties did enter into this agreement.

The action is statute barred

67. The HCU’s causes of action in this claim for HCU are badly pleaded. On the one hand in the

claim form the claim against Mr. Jaikaran is for “rescission of the compromise agreement by

launching WIN TV in March 2007 and broadcasting under the style WIN TV on 1st May

2007” and repayment of the sum of $10m. In its statement of case however it claims a

declaration that the Defendant holds the $10m on a resultant trust for the Claimant and

payment over of the $10m. There is a bare plea in its Statement of Case that Mr. Jaikaran

holds the $10m on a resulting trust. However the claim was articulated and argued as breach

of contract and for damages for rescission of the contract.

68. At paragraph 17 of its Statement of Case the HCU pleads the following aspects of Mr.

Jaikaran’s alleged breach of the compromise agreement:

“The Claimant did accordingly forebear to prosecute the said High Court Action, but

notwithstanding the First Defendant in breach of the said Compromise Agreement:

i. Has from and since in or about the first week of April 2007, commenced

operations for the television station (WIN TV) by broadcasting a test signal on

Channel 72 and now continues to broadcast the same on Channel 12;

ii. Failed and or neglected and or refused to continue to pursue the transfer of the

said Licence to Global TV Limited in further pursuit of the said letter of 27th

June, 2004.

iii. Failed and or refused and or neglected to take or cause to be taken any steps to

convert the said $2.4 Million [out of the $10 million] that was placed in an

Income and Growth Account into shares with Global TV Company Limited.”

69. See also paragraph 61 of Mr. Harnarine’s witness statement which stated:

“From and since in or about the first week of April 2007, Jaikaran commenced operations

of the television station (WIN TV) by broadcasting a test signal on Channel 72.

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Subsequently he was regularized and WIN TV started to broadcast on Channel 12 which

it continues to do till today.”

70. By virtue of section 3(1) of the Limitation of Certain Actions Act the Claimant’s action for

breach of contract “shall not be brought after the expiry of four years from the date on which

the cause of action accrued”. In Peak Petroleum Trinidad Limited v Primera Oil and Gas

Limited and Others CV2011-02039 Justice Jones commented:

“It is trite law that with respect to contracts time begins to run or the cause of action

accrues as soon as there is a breach of contract. The question of when a breach of a

contract occurs is an issue of fact to be determined by the Court in the light of the

surrounding circumstances.”

71. Counsel for Mr. Jaikaran contends that the breach occurred as early as January 2007 when

HCU complained of Mr. Jaikaran’s breach of the agreement to TATT. According to the HCU

Mr. Jaikaran undertook by virtue of the alleged compromise agreement to use the television

licence exclusively for the use of Global TV and to abandon his promised project of WIN

TV. Any act which is not in accordance with this term is a breach of that express provision.

In Mr. Harnarine’s testimony he stated at paragraph 59:

“Notwithstanding that he entered the Compromise Agreement, I learnt that Jaikaran was

proceeding with the launch of WIN TV. I caused the HCU, through Mr. Bachan, to send

a letter dated January 10, 2007, to TATT outlining the history of our relationship and

Jaikaran’s breach of all agreement and requesting that TATT “intervene and take

whatever appropriate action pursuant to the Telecommunications Act to assist our

organization [the HCU] having the matter resolved.” I do not have a copy of that letter

but happily I noticed that a true copy of that letter is contained in the Jaikaran’s Bundle

No. 14.”

72. There are two letters which demonstrate that HCU was well aware that Mr. Jaikaran intended

to breach the compromise agreement well before March 2007. The letter issued by Mr.

Jaikaran’s attorneys in December 2006 evinced a clear intention not to honour any

compromise agreement if it existed and indeed revoked the original sales agreement and joint

venture agreement. No clearer act is needed of a breach of contract. In my view time began

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to run from that date or at the latest in January 2007. When HCU issued its letter to TATT

complaining of Mr. Jaikaran’s breach of their agreement. There is no evidence of any action

by the HCU between December 2006 to April 2007 which suggests that it did not accept Mr.

Jaikaran’s breach of contract or called upon him to fulfil his obligations. In fact by January

2007 it was clear that Mr. Jaikaran had terminated the original agreements, did not consider

himself bound to any joint venture with HCU and was proceeding to utilise his own

television and radio licence exclusively. The HCU’s causes of action arose at that time.

73. Hochster v de la Tour (1853) 2 E & B 678 establishes the general principle that a party can

sue for breach of contact even though the due date for performance has not arrived if the

other party has manifested an unequivocal intention not to perform his obligations under the

contract. As a matter of principle time begins to run as soon as the Claimant is able to sue

since that is when his cause of action accrues. If the action therefore is in substance a claim

for breach of contract which paragraph 14 of the Statement of Case seems to suggest, then

cause of action occurred when Mr. Jaikaran evinced his unequivocal intention not to perform

his obligation under the alleged contract by his letter issued in December 2006.

Illegality

74. The telecommunications services industry is regulated by the Telecommunications Authority

(“the Authority”) established under the Act. Counsel for Mr. Jaikaran contends that the

compromise agreement, if it exists, is in fact unenforceable under the Act and has as its

object the commission of an act which is illegal by that statute. If parties enter into a

prohibited contract contrary to a statute that contract is unenforceable. See paragraph 16-142

Chitty on Contract 30th

Ed and St John Shipping Corp v Joseph Rank Ltd [1957] 1 QB

267.

75. See Halsbury Laws of England 4th

Ed Vol. 22 (2012) para 452:

“This section of the title is concerned with the enforceability of the contract if it is illegal.

In this context a distinction must be drawn between illegality at common law and

illegality arising from statutory prohibition, express or implied, of the contract, though

both may be relevant in an individual case. There are two general principles.

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The first is that a contract which is entered into with the object of committing an illegal

act is unenforceable. The application of this principle depends upon proof of the intent, at

the time the contract was made, to break the law; if the intent is mutual the contract is not

enforceable at all, and, if unilateral, it is unenforceable at the suit of the party who is

proved to have intent.

The second principle is that the court will not enforce a contract which is expressly or

impliedly prohibited by statute. If the contract is of this class it does not matter what the

intent of the parties is; if the statute prohibits the contract, it is unenforceable, whether the

parties meant to break the law or not.

A significant distinction between the two classes is this: in the former class one has only

to look and see what acts the statute prohibits; it does not matter whether it prohibits a

contract; if a contract is deliberately made to do a prohibited act, that contract will be

unenforceable. In the latter class, what has to be considered is not what acts the statute

prohibits, but what contracts it prohibits, and the intent of the parties is irrelevant; if the

parties enter into a prohibited contract, that contract is unenforceable.”

76. The effect of the alleged compromise agreement was to assign the radio licence to Radio

Massala and to allow for the exclusive use of the TV licence by Global TV. This object was a

clear breach of the conditions of the licences issued pursuant to the Act and the conditions

made pursuant to Sections 21(1)(c)(d) and 22 of the Act and A1, A2 and A20 of the

concessions granted to Mr. Jaikaran.

77. The effect of the statutory conditions was that the licensee shall not transfer control of the

concessionaire or assign the concession or part with the licences or any permission or right

obligation or benefit granted under the licence or enter into any joint venture management

agreement or other agreement or other agreement permitting a 3rd

party to obtain rights and

privileges in the licence without the prior written approval of the Authority.

78. The alleged compromise agreement was therefore one which the statute meant to prohibit.

See St John Shipping Corporation v Joseph Rank Limited [1957] QB 267. The objectives

of the agreement are indeed met with criminal sanctions set out under section 65(a) (b) (f) of

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the Act. The illegality of assigning licences or divesting control of a concession without the

prior consent of the Authority in my view strikes at the heart of one of the object of the Act

which is to facilitate the proper monitoring of concessionaires by the Authority. It is

therefore an illegality which underpins HCU’s claim and which the Court should take notice

of. If the HCU therefore obtains relief under this agreement the Court will be seen to be

indirectly assisting and encouraging the parties in an act prohibited by statute. See

Thackwell v Barclays Bank plc [1986] 1 All ER 676.

79. Counsel for HCU submitted that it will be an affront to the public conscience to deny HCU

relief. Se Ambrose v Boston (1993) 55 WIR 184. However the intention of the Act was to

prevent this very type of activity in which the parties had engaged from occurring. Such

agreements which are executed without the Authority’s prior written approval significantly

weakens and undermines the supervisory powers of the Authority in monitoring and

regulating the telecommunications industry.

80. Severance of the offending parts of the agreement would not save the contract for its

illegality as its entire object was to secure the exclusive operation of the television and radio

licence by entities other than the concessionaire in contravention of the Act.

Conclusion

81. The Claim is therefore dismissed. HCU will pay to Mr. Jaikaran costs on the prescribed scale

in the sum of $250,000.00.

Vasheist Kokaram

Judge

REPUBLIC OF TRINIDAD AND TOBAGO IN THE HIGH COURT OF...

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